As Russia Controls 51 Ukraine Ships And Moves More Tanks To The Borders, Obama Denounces "Brute Force"Submitted by Tyler Durden on 03/26/2014 18:31 -0400
President Obama denounced Russia's "brute force" in Ukraine during a speech in Brussels today, but it seems from the images and clips below that Russia cares little for words and is more about strategic actions for now. Russia now, reportedly, controls 51 Ukraine Navy ships and while Merkel is talking tough, she is careful not to be too aggressive in her call for escalation. After some de-escalation after the referendum, NATO (and increasingly social media) confirm that things are re-escalating as Russia tanks were being moved en masse across the nation to various borders.
It seems the words of Polish Prime Minister Donald Tusk warning that “the world stands on the brink of conflict, the consequences of which are not foreseen... Not everyone in Europe is aware of this situation," are a little more real than some (US equity buyers) might suspect. As The Week's Crispin Black reports, at least 7,000 Polish workers in Europe have received call-up papers as army reservists in the last few weeks. Polish authorities dismiss it as "routine" but the men note this has never happened before.
While Naftogaz (Ukraine's gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine. This 'adjustment' follows increased sanctions by the West as Medvedev's notable statement this morning that Ukraine owes Russia $16bn. Furthermore, Gazprom has cut its Diesel output by the most in 7 months... and just to rub some Black Sea salt into the wound, NY Times reports that Russia's asking price for natgas to Europe is soaring.
Ukraine Official Warns "Chance Of War With Russia Growing" As Mike Rogers Calls For Sending Weapons To UkraineSubmitted by Tyler Durden on 03/23/2014 12:44 -0400
Concurrently with out post on what the odds are of a war between the US and Russia over Ukraine, the House Intelligence Committee Chairman Mike Rogers, and war hawk, appeared on TV this morning saying that the United States ought to provide weapons to the Ukrainian army "so it could defend the country from a Russian invasion." This is the same Mike Rogers who last August did everything in his power to perpetuate the lie that Syrians had used chemical weapons against "rebels" (who subsequently turned out to be mostly Qatari-funded Al Qaeda mercenaries and other Islamic extremists) “There are things that we can do that I think we’re not doing. I don’t think the rhetoric (from Obama administration officials) matches the reality on the ground,” he said. And while US neocons are warmongering, Ukraine is all too happy to raise the tension level just a bit more, hoping that NATO will finally intervene and present Putin with at least some hurdle to overrunning all of East Ukraine, using exactly the same template as already show in Crimea: Ukraine’s top diplomat warned Sunday that the chances of war with Russia “are growing” due to the buildup of Moscow’s forces along his country’s eastern border. In an interview with ABC’s “This Week,” acting Ukrainian Foreign Minister Andrii Deshchytsia said Kiev “is ready to respond” should Russia–which has already seized the Crimea–move further in Ukrainian territory.
White House attacks Russian financial markets and oil, Merkel suffers from “moral cowardice,” Russia develops “Putin Doctrine,” in crescendo of sanctions and counter-sanctions
Amid the growing Crimea crisis, Estonia, Latvia and Lithuania - which like Ukraine were all parts of the old Soviet Union and have very significant concentrations of ethnic Russian-speaking citizens - have expressed growing apprehension over Moscow's intentions. As Reuters reports, Russia signaled concern on Wednesday at Estonia's treatment of its large ethnic Russian minority, comparing language policy in the Baltic state with what it said was a call in Ukraine to prevent the use of Russian. "Language should not be used to segregate and isolate groups," the envoy noted, referencing the same 'linguistic tensions' that supported its annexation of Crimea.
Ukraine Announces Joint US Military Exercises As Obama Rules Out "Military Incursion" - Recap Of The Day's EventsSubmitted by Tyler Durden on 03/19/2014 18:12 -0400
With the story of the day undoubtedly Yellen's first (bungled) press conference, it was easy to forget that the second coming of the Cold War is raging in the Ukraine. For those curious what they may have missed, here is a summary of the major events that took place in the troubled country this afternoon. Highlights from AP, AFP, Reuters, WSJ, Bloomberg, RIA and Interfax.
A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality: "U.S. CONSIDERING SANCTIONS ON RUSSIAN BANKS, OFFICIAL SAYS. So short London/NYC real estate you say?" How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said "Nein" to any truly crippling trade blockade of Moscow would backfire on Germany's own economy and bottom line. But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous: "It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine."
As we reported yesterday, after getting permission to cross the Bosphorus, the guided-missile destroyer USS Truxtun departed the Greek port of Souda Bay on its way to the Black Sea. As of a few hours ago, it is already there. Sky News reports that the USS Truxtun passed the Dardanelles strait earlier today on its way to the Black Sea amid heightened tension over the crisis in Ukraine and reports that Russia has now 30,000 troops in Crimea.
As the big questions surrounding the future of the Ukraine crisis persist, the countries neighboring the former communist nation, and especially the Baltic states which are members of NATO, are asking for safeguards should Russian ambitions end up just a little too big to be contained solely by the Ukraine. As a result, the WSJ reports, they are considering calling for a greater North Atlantic Treaty Organization presence in their countries “if the situation gets worse” in the Ukraine, Ojars Kalnins, the chairman of the foreign-affairs committee of the Latvian parliament, said Monday. Mr. Kalnins said that a worsening of the Ukraine crisis “such as an outright invasion” of areas outside Crimea would present a threat to all of Russia’s neighbors, including the Baltic states–which are members of NATO. Such an expanded conflict should be reason for NATO to “bring extra military support to the Baltic region as a safeguard.”
At this stage we see very little from the Ukraine priced into the market as a best-case (encroachment into Eastern Ukraine that is quickly and peacefully resolved) scenario appearing to be the blissful hope. However, as some of the other scenarios (described below) potentially come into play, whether in reality or perception, the risk to further downside in the market is significant. Since we are already recommending being short based on the economy and the misperception of the Fed’s next steps, you effectively pick up the conflict for free. With VIX being so low, picking up some downside protection makes a lot of sense here.
Dispassionate look at next week's calendar.
The bad feelings concerning Russia run deep in the Western parts of Ukraine (as they topple statues of Lenin in growing numbers) while in the East they see themselves much more as Russians. These feelings run very deep in the region and memories do not fade so easily as the mayor and police chief of Kerch vigorously defend the Ukrainian flag in the clip below - deep in the eastern Crimea region (that Russia has already suggested it is willing to go to war over). Russian President Vladimir Putin has now been placed in a very difficult position, as Martin Armstrong notes, the entire set of circumstances creates the image of events in Ukraine that have diminished the power of Russia, which is a matter of pride and the only stable resolution remains a split along the language faultline. The critical question then is - will Putin let it go?
A recent article at the BBC discusses the findings of a report by EU Home Affairs commissioner Cecilia Malmstroem on corruption in the EU. According to the report, the cost of corruption in the EU amounts to €120 billion annually. We would submit that it is likely far more than that (in fact, even Ms. Malmstroem herself concurs with this assessment). This is of course what one gets when one installs vast, byzantine bureaucracies and issues a veritable flood of rules and regulations every year. More and more people are needed to administer this unwieldy nightmare of red tape, and naturally the quality of the hires declines over time due to the sheer numbers required. And that is merely what they actually know about...One gets an inkling of how big the problem may really be when considering the case of Greece.
As if we didn’t know it already! The Western world is the ultimate destination for corruption, pulling a swift one and swiping the valuables from the inside pocket of the guy’s pants standing in front of you as he keeps his beady eye on the economy.